In the world of fast food there are a number of formidable players and Burger King (NYSE:BKC) is clearly one of them. But unfortunately the company is going to have a tough time getting out from behind the massive shadow cast by the legendary McDonald's (NYSE:MCD) and to win over the hearts of investors in this space Here is why. (Find out about the man who made McDonald's the giant it is in CEOs Who Blazed The Trail (Kroc, Hock And Welch).)

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Well Done, But Is That Enough?
To its credit the company seems to be getting itself out there and trying to get investors to pay attention. It presented at the Goldman Sachs Lodging, Gaming, Restaurant & Leisure Conference earlier this week. It has also been performing well, having surpassed analyst expectations in three of the past four quarters despite a difficult economy here in the United States and of course extremely tough competitive forces from the likes of McDonald's and Wendy's (NYSE:WEN) in the lunch and dinner business as well as Starbucks (Nasdaq:SBUX) in fights for breakfast and lunch crowds.

The company is a well established player in the world of fast food, it has a top notch reputation and serves quality products. However, that isn't enough to knock McDonald's off the top pedestal and/or to get the investment community interested.

In order to do that the company would have to come out with something really special on the product front and/or find some other way to become a "go to" for families on the go. So far I'm not seeing that. In the months ahead the company will have to deal with what could be popular (McDonald's) McCafe offerings and the foot traffic they might draw. Note that McDonald's made headlines earlier this week after offering solid May sales figures. Not to mention that Starbucks continues to promote its instant coffee Via, which could be a draw away from BKC.

What About The Casual Dining Chains?
As the economy switches to a higher gear, casual chains that are known for waiter service and hearty lunches and dinners are likely to see traffic pick up and receive a sales boost. Among my favorite chains on the full service casual dining front are Darden (NYSE:DRI), which has Red Lobster and Olive Garden chains, and Brinker International (NYSE:EAT), known for Chili's. But if the economic recovery is spotty and consumers pause at spending, these chains could stumble or falter when it comes to earnings. In short, I like these companies and stocks for the much longer haul, but my near-term concern for the economy would keep me cautious and probably on the sidelines waiting for more advantageous entry points.

Bottom Line
Restaurant stocks offer upside potential for the long run, but because the consumer isn't likely to go out and spend with total abandon in the very near future and because a hearty recovery could well take some time, fast food chains seem more attractive than upscale restaurants. McDonald's seems like the most attractive company there because of its dominance and continued ability to bring people into its locations as well as its McCafe push. Burger King is good and its stock could certainly see upside. But again, given the choice, McDonald's appears to deserve the most attention. (For more stock analysis, take a look at 4 Reasons Why Book Value Growth Matters.)

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Tickers in this Article: BKC, MCD, WEN, SBUX, DRI, EAT

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